A report from the State Bank (SBV) says that the bullion gold trading value has been decreasing since 2014, up to 50 percent. Previously, there were 12,000 businesses and shops trading gold bullion, but the figure has dropped to 2,200.

Since 2012, SBV has not granted any license to import gold materials to make jewelry domestically. 

Decree 24 stipulates the state’s functions of gold market management and intervention.

In 2005, one could buy one tael of gold with just VND10 million. Later, the economic upheaval of the world economy in 2007-2009 increased the international and domestic gold prices. After seven years, the gold price soared to VND47 million per tael in 2012.

This was the ‘golden age’ of gold trading companies.

In 2011, Saigon Jewelry (SJC) reported huge revenue of VND111 trillion. In 2012, the sales of gold brought VND72 trillion to the company. But the figure dropped sharply after the decree took effect.

In 2017, it reported revenue of VND23 trillion, a slight increase over 2016, but it was much lower than that of 2009-2012.

The same situation is occurring with Phu Nhuan Jewelry (PNJ). In 2009, it reported revenue of over VND10 trillion. In the next years, or the ‘gold fever period’, the figure rose to VND13.8 trillion in 2010 and VND18.038 trillion in 2011. However, the revenue in 2012, when the Decree 24 took effect, plunged to 1/3 of 2011.

The record of VND18.038 trillion in revenue in 2011 has not been broken though PNJ’s distribution network has become much larger.

The Decree 24 has made bullion gold less attractive, and has also put the biggest market share into the hands of large companies, namely SJC and PNJ.

As a result, gold companies have chosen other ways to go. Most of them have reduced the trading of bullion gold while increasing jewelry gold sales.

In fact, analysts said, bullion gold brings very high revenue, but the profit is modest with the gross profit margin of bullion gold at below 1 percent of total revenue.

PNJ reported a sharp decrease in revenue since 2012, but the profit it makes has been increasing. Its chair Cao Thi Ngoc Dung said the revenue in 2012 was lower than planned because of the sharp bullion gold sales decrease. However, since the jewelry trading is growing, the company can maintain high profits.

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